U.S. v. Hoelker

• Decision Date: 17 July 1985
• Docket Number: Nos. 84-5040,84-5113,s. 84-5040
• Citation: 765 F.2d 1422
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. George HOELKER, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Douglas Paul LINN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1422

765 F.2d 1422

UNITED STATES of America, Plaintiff-Appellee, v. George HOELKER, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Douglas Paul LINN, Defendant-Appellant.

Nos. 84-5040, 84-5113.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 4, 1985.

Decided July 17, 1985.

Richard Marmaro, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Michael T. Kenney, Santa Ana, Cal., David A. Elden, Los Angeles, Cal., for defendant-appellant.

Appeal from the United States District Court for the Central District of California.

Before BROWNING, Chief Judge, SNEED and SKOPIL, Circuit Judges.

PER CURIAM:

George Hoelker, a special agent with the federal Drug Enforcement Administration, and Douglas Paul Linn, an ex-deputy sheriff with the Los Angeles County Sheriff's Department, appeal convictions of various cocaine-related and extortion charges. We affirm.

The indictment contained eleven counts. Count 1 alleged a conspiracy beginning in March 1982 to possess with intent to distribute and to distribute a "multi-pound" (2 kilo) quantity of cocaine. It was alleged that as part of the conspiracy, defendants on March 11 and 12 distributed small quantities of the cocaine as samples to named prospective purchasers. Count 2 alleged possession of the cocaine. Counts 3 through 8 alleged possession and distribution of the samples. Count 9 alleged a conspiracy from January to May 1982 to violate the Hobbs Act, 18 U.S.C. Sec. 1951 (1982), by extorting money from a named victim (Lang) by threats of violence; Count 10 alleged the underlying substantive violation of section 1951. Count 11 charged Hoelker with solicitation of a bribe in April 1982 in violation of 18 U.S.C. Sec. 201(c)(3) (1982).

I.

Appellants contend the trial court erred in denying their pretrial motion to dismiss the Hobbs Act counts. The trial court dismissed these counts after trial, but defendants argue failure to dismiss before trial permitted introduction of prejudicial and extraneous testimony.

"The elements of a Hobbs Act violation are extortion and a nexus with interstate commerce." United States v. Zemek, 634 F.2d 1159, 1173 (9th Cir.1980). Both were charged in adequate detail in the indictment.

" '[E]xtortion' means the obtaining of property from another with his consent, induced by wrongful use of actual or threatened force, violence, or fear...." 18 U.S.C. Sec. 1951(b)(2). The indictment alleged that Hoelker and Linn "threatened Jack Lang with physical violence in order to force Lang to sign [a life] insurance policy application" which "named defendant Hoelker as the beneficiary."

"The effect on interstate commerce need only be de minimis ... [and] need only be 'probable' or 'potential.' " Zemek, 634 F.2d at 1173 n. 20. The indictment alleged the policy in question was "to be issued by the Kentucky Central Life Insurance Company of Lexington, Kentucky, a business engaged in interstate commerce"; that Linn had submitted the application to the company; and that he had contacted the company to have the policy approved.

We reject appellants' argument that prosecution under the Hobbs Act was precluded by the McCarran-Ferguson Act, 15 U.S.C. Sec. 1012(a) (1982), which provides that "the business of insurance ... shall be subject to the laws of the several States which relate to the regulation or taxation of such business."

The latter statute, appellants argue, relinquished jurisdiction over the business of insurance to the states. Thus, appellants assert, "[a] transaction within the business of insurance is not a transaction in 'commerce' " within the meaning of the Hobbs Act.

The Hobbs Act does not exempt the business of insurance. The Act explicitly applies to "all commerce between any point in a State ... and any point outside thereof." 18 U.S.C. Sec. 1951(b)(3). Cf. United States v. Gill, 490 F.2d 233, 237 (7th Cir.1973) ("[S]tate preemption in regulating liquor does not preclude the federal government from prohibiting extortion which affects interstate commerce under authority of the Commerce Clause."). Allegations that defendants' scheme involved interstate communication and affected a company engaged in interstate commerce were sufficient to require denial of a motion to dismiss. Cf. United States v. Brooklier, 685 F.2d 1208, 1217 (9th Cir.1982) (per curiam).

We also reject defendants' argument that no "property" was taken from Lang since it appears from the face of the indictment that Hoelker had a bona fide claim to the money sought to be obtained. "The concept of property under the Hobbs Act has not been limited to physical or tangible 'things.' The right to make business decisions ... free from wrongful coercion is a protected property right." Zemek, 634 F.2d at 1174. The property right involved in this case is Lang's right to make personal and business decisions about the purchase of life insurance on his own life free of threats and coercion.

We do not consider Hoelker's argument that the trial court erred in failing to dismiss the bribery charge before trial. Hoelker did not ask the district court to do so. United States v. Whitten, 706 F.2d 1000, 1012 (9th Cir.1983).

II.

Hoelker complains of the denial of his motion to be tried separately from Linn. The motion was based solely on the ground that Linn would testify favorably to Hoelker but only at a separate trial. Severance is rarely granted on this ground, United States v. Gay, 567 F.2d 916, 919 (9th Cir.1978), and denial in this case was not an abuse of discretion.

Hoelker's assertion that Linn would waive his fifth amendment rights and testify was supported only by the conclusory hearsay statement of Linn's counsel as to statements Linn had made to him. See United States v. Boscia, 573 F.2d 827, 832 (3d Cir.1978). According to Linn's counsel, Linn's testimony would have repeated Hoelker's version of the facts and therefore would have been cumulative. See United States v. Finkelstein, 526 F.2d 517, 524 (2d Cir.1975). Linn's testimony would have been subject to damaging impeachment. His testimony at an earlier separate trial for narcotics offenses had been rejected by a jury which had just convicted him both of the narcotics offenses and of perjury. See United States v. Boscia, 573 F.2d at 833. The loss of judicial economy in trying the two defendants on multiple charges arising out of their joint conduct would have been substantial. See Finkelstein, 526 F.2d at 524. Moreover, Hoelker's motion was untimely; it was not made until the day before the scheduled trial date and two months after the date for filing pre-trial motions. United States v. Butler, 611 F.2d 1066, 1071 (5th Cir.1980).

III.

The district court acted within its discretion in denying Hoelker's motion to sever the Hobbs Act counts from the narcotics charges.

The attempted extortion and the drug offenses were logically related by motive, United States v. Ford, 632 F.2d 1354, 1372 (9th Cir.1980), and "arose out of the same series of transactions," id. at 1371. According to the government's theory, Hoelker was in serious financial trouble and was in danger of losing his house because of a losing investment in Lang's auto racing enterprise. Hoelker's need for funds explained why Hoelker became involved in plans to sell cocaine and to coerce Lang into signing an insurance policy on his life naming Hoelker as the beneficiary. See United States v. Tierney, 424 F.2d 643, 646-47 (9th Cir.1970). The extortion and the narcotics offenses occurred during the same brief time span, involved many of the same participants, and were connected by a large area of overlapping proof. See United States v. Anderson, 642 F.2d 281, 284 (9th Cir.1981).

Hoelker failed to establish that joint trial of the offenses was "manifestly prejudicial" to him for reasons much like those discussed in the opinion in the similar case of United States v. Irvine, 756 F.2d 708, 712 (9th Cir.1985). The trial judge carefully instructed the jury on each count of the indictment, and twice admonished the jury that each count contained a distinct charge that must be separately analyzed. Absent some indication to the contrary, we must assume the jury followed the judge's instructions. United States v. Sanford, 673 F.2d 1070, 1072-73 (9th Cir.1982) (quoting United States v. Johnson, 618 F.2d 60, 62 (9th Cir.1980) ).

IV.

Hoelker argues testimony that Linn furnished cocaine to two teenage girls and to Linn's ex-wife when she was 21, even if admissible as to Linn, was irrelevant and unfairly prejudicial as to Hoelker since he was not involved in these distributions.

The trial judge instructed the jury that the challenged testimony was admissible only as to Linn and could not be considered against Hoelker, and repeated the instruction at the conclusion of the trial. Absent evidence to the contrary, we assume the jury adhered to these instructions. Sanford, 673 F.2d at 1072.

Hoelker also objects to testimony by Cleon Mickey Weaver regarding Hoelker's distribution of cocaine to Weaver in 1978 and 1979, three to four years before the offenses charged, allegedly to compensate Weaver for acting as an informant for Hoelker. Proof of these distributions was relevant to demonstrate Hoelker's willingness to deal in illegal drugs and to explain why he trusted Weaver and attempted to draw him into the conspiracy. We cannot say the trial court abused its "wide discretion" under Fed.R.Evid. 403 to determine that the probative value of Weaver's testimony outweighed its prejudicial character. United States v. Nadler, 698 F.2d 995, 1000 (9th Cir.1983).

Nor are we prepared to second-guess the trial judge's decision that the testimony of Hopkins, Bolter and Pyryezstov regarding Linn's distributions of cocaine to Bolter and Hopkins from 1980 to 1982 was more probative than prejudicial. This testimony was relevant to show the background and development of the conspiracy, Nadler, 698 F.2d at 1000; to explain the...